Reddit (RDDT) shares have surged 96.7% in the past six months, outperforming the Computer & Technology sector by 69.3%. The company’s strong user engagement, rising daily and weekly active users, and gains in Average Revenue Per User (ARPU) have contributed to this growth.

Reddit is benefiting from its investment in AI-powered tools, with 116 million daily active users and 444 million weekly active users in Q3 2025. The introduction of Reddit Answers and AI-powered search features has driven user engagement and search functionality improvements.

Advertising revenue for Reddit surged 74% year over year to $549 million in Q3 2025, driven by expanding relationships with advertisers and new customer acquisitions. The total active advertiser count grew by over 75%, showcasing strong advertiser adoption and performance outcomes.

RDDT’s earnings estimates show an upward trend, with expectations of revenue growth of 62.78% in 2025. The company’s expanding portfolio and user engagements are expected to drive top-line growth, with a Zacks Rank #1 (Strong Buy) and a Growth Score of A.

Reddit’s stock is currently trading at a premium, with a Value Score of F and a forward 12-month Price/Sales ratio of 14.44. Despite the premium valuation, the company’s expanding advertising business, growing clientele, and improved user experience justify the stock’s performance.

Read more at Nasdaq: Reddit Surges 97% in the Past 6 Months: Is the Stock Worth Buying?